Block Legal Tech 2.0, Oct. 24, 2019: At Kent College of Law in Chicago

Jenny Balliet

Published in

Athena.Trade

5 min readOct 8, 2019

The Seminal Blockchain for Regulatory & Policy Surrounding Blockchain & Digital Assets

*BlockLegalTech.com* *October 24, 2019 at Kent College of Law*

2019 The Block(Legal) Tech Conference:

The Block(Legal) Tech Conference is the seminal, day-long legal-themed blockchain conference. The conference is held in the Fall in downtown Chicago, Illinois at Chicago Kent Law School, and is provided at no cost to attendees. This year’s conference will be on October 24. Rather than focusing on the basics, this conference was intended to serve as a one-day, advanced education on blockchain and the law. The conference was designed for industry experts to debate and explore the most pressing legal issues in the blockchain, crypto, and digital asset space.

Register Here | Visit the website BlockLegalTech.com | Sponsorship

2018. Last year, the conference featured Ted-style talks, fireside chats, and other presentations from a host of leading lawyers, entrepreneurs, regulators, and academics. FinCen Director Kenneth Blanco provided the keynote address, and followed a litany of thought-provoking talks by Professor Angela Walch, Professor Tony Lai, Nina Kilbride, Stephen Palley, Preston Byrne, Joshua Klayman, Andrew Hinkes, Athena Blockchain, John Roth, Amy Hartman (SEC), Jess Cheng (IMF) INTERNATIONAL MONETARY FUND (IMF), Kevin Batteh, Amy Davine Kim, Jason Henrichs, Peter Hunn, Jennifer O’Rourke, Colleen Sullivan, CMT Digital Limited, and other tremendous speakers. Many of the talks from the conference can be found on Chicago Kent’s website.

2019. This year, we have an equally exciting lineup of speakers, including SEC Commissioner Hester Peirce, author and visionary Michael Casey, Protocol Labs, GC Marvin Ammori, @OVIOHQ (Outlier Ventures) Partner Rumi Morales, the Federal Reserve’s Robert Bench, Lewis Cohen DLx Law, Linklaters Partner Joshua Klayman, and a number of other crypto counsel.

All speakers confirmed thus far #BlockLegalTech 2.0

Press. The conference received extensive press coverage in CoinDesk, cointelegraph, Crowdfund Insider, the ABA Journal, PYMNTS.com, the National Law Review, and a great many other publications. The conference is free to all, but only the first 800 registrants can be admitted. Last year, due to incredible interest, registration had to be closed well in advance of the event, and — given the reception to last year’s conference — we anticipate another packed house for this year’s conference.

2018 BlockLegal Tech Key Highlights on Regulation

Regulation a Menagerie

Regulation can be difficult to navigate in the fields of emerging technology. From the multiple intersections, many at this point which may appear inconsistent on their face, to the dynamic nature of the tech itself, a cogent regulatory scheme is imperative.

Dir. Blanco, offered a thought provoking look from FinCEN,

“In short, individuals and entities engaged in the business of accepting and transmitting physical currency or convertible virtual currency from one person to another or to another location are money transmitters subject to the AML/CFT requirements of the BSA [Bank Secrecy Act] and its implementing regulations. To comply with these obligations, virtual currency money transmitters are required to (1) register with FinCEN as a money services business, (2) develop, implement, and maintain an AML program designed “to prevent the [MSB] from being used to facilitate money laundering and terrorist finance,” and (3) establish recordkeeping, and reporting measures, including filing Suspicious Activity Reports (SARs) and Currency Transaction Reports (CTRs). It is important to understand that these requirements apply equally to domestic and foreign-located convertible virtual currency money transmitters, even if the foreign located entity has no physical presence in the United States, as long as it does business in whole or substantial part within the United States.” [1]

Compliance: Woven into Every Step. Full Stop.

Ultimately, stating that compliance is not an afterthought, but rather should be interwoven into every step of one’s business. He further iterated that cryptocurrencies acting as fiat are in fact covered under the 2011 rule FinCEN issued on Money Service Businesses. [8]

“‘The Treasury’s Financial Crimes Enforcement Network and the Internal Revenue Service ‘have examined over 30 percent of all registered virtual currency exchangers and administrators since 2014,’ said Kenneth A. Blanco, FinCEN’s director, in an Aug. 9 speech to the Block (Legal) Tech conference at Chicago-Kent College of Law. ‘And there is no question we have noticed some compliance shortcomings.’
Specifically, Blanco maintains that adequate money laundering controls are not put in place until a trading platform or peer-to-peer exchanger gets an investigation notice…

‘Let this message go out clearly today: This does not constitute compliance,” he said. “Compliance does not begin because you may get caught, or because you are about to be discovered. That is not a culture that protects our national security, our country, and our families. It is not a culture we will tolerate.”’[6]

Inter Agency Cooperation is Underfoot

The issue of inter-department cooperation was addressed in kind. This sentiment has been reiterated multiple times, the regulators are working together, and invite commentary. This has been the main talking point from SEC Fin Hub to Lab CFTC. [9][10]

“In addition, Blanco noted that the agency has been working closely with other regulators, including the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC) on “policy development and regulatory approaches” related to cryptocurrency. Dir. Blanco referenced initial coin offerings (ICOs) during his remarks, noting that

‘this rapidly growing area has gained a lot of recent public attention.’

In his remarks, he took care to highlight fraud in fundraising as a point of high ‘focus’.

“‘While ICO arrangements vary and, depending on their structure, may be subject to different authorities, one fact remains absolute: FinCEN, and our partners at the SEC and CFTC, expect businesses involved in ICOs to meet all of their [anti-money laundering/combating the financing of terrorism] obligations. We remain committed to taking appropriate action when these obligations are not prioritized, and the U.S. financial system is put at risk.’” Id.

Given the frameworks issued this year, the launch of FinHub, and LabCFTC, there is bound to be much to discuss at BlockLegalTech 2.0 [9],[10],[11]